Transcript

He was at Christmas Island's immigration detention centre yesterday, a South Australian steelworks this morning and this evening he's in Alice Springs to look at Indigenous issues.

It's all part of an energetic bid to keep the home fires burning while the Prime Minister struts the world stage.

From Canberra, here's our political correspondent Tom Iggulden.

TOM IGGULDEN, REPORTER: A steelworks in Whyalla's the latest backdrop for Tony Abbott to breathe more life into his anti-carbon tax message.

He's missing no opportunity to talk about the tax, including today's release of worse-than-expected inflation figures: 1.6 per cent for the March quarter edging up the annual rate to 3.3 per cent.

That could put pressure on interest rates, even though the Government's arguing price hikes are largely the short-term result of Queensland's natural disasters.

But Tony Abbott's staying on message.

TONY ABBOTT, OPPOSITION LEADER: One of the big impacts has been fuel, one of the other big impacts has been power. Now fuel and power haven't been impacted by the floods and the cyclones. Fuel and power prices will be impacted by the Government's carbon tax.

TOM IGGULDEN: And so it was left to the Treasurer to play down the inflation result's impact on interest rates, pointing to a recent address by the Reserve Bank governor Glenn Stevens.

WAYNE SWAN, TREASURER: And he made the point that when there are temporary spikes they tend to look through those temporary spikes and they tend to look at what the longer term outlook is.

TOM IGGULDEN: Increases in food and fuel were the biggest contributors to the result, but Wayne Swan's urging people to look past volatility in individual prices and focus on an almost unchanged underlying inflation result.

WAYNE SWAN: Underlying inflation demonstrates that when you do strip out the spike that's been caused by the disasters, it is still around its lowest level in a decade.

TOM IGGULDEN: Independent economists agree there'll probably be no short-term rise in interest rates, but they're more cautionary about the longer term.

CHRIS RICHARDSON, ACCESS ECONOMICS: Higher interest rates in Australia are still very much on the agenda and today is the start of the turn in Australian inflation.

TOM IGGULDEN: The data drove the Aussie dollar past 108 US cents on its way to a 29-year high, protecting against even higher fuel prices for now. But the rivers of cash flooding into the country from the mining boom part two are a much bigger factor.

CHRIS RICHARDSON: But it's a lot of dollars, and we're still choking on that. Great news, good news for many Australians, but it will show up as higher prices and ultimately higher interest rates in part because we just don't have the people power to meet the demands being made of us.

TOM IGGULDEN: Little wonder then the Government's broadly hinting it'll try and encourage more people into the workforce through changes to the welfare system in next month's budget. And in Beijing tonight the Prime Minister's also acknowledged there might also need to be an increase in immigration.

Tom Iggulden, Lateline.

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